Russia limits export of gasoline and diesel due to record price jump

Russia has announced a decision to limit the export of automobile gasoline and diesel fuel, according to a statement on the website of the Russian government.

The decision was made to stabilize fuel prices on the domestic market, the message says. The Kremlin is counting on the temporary restrictions to help saturate the fuel market, which will lower prices for consumers.

The shortage of fuel on the Russian market arose in July-August, and the price hike significantly accelerated in September.

Russian outlets cite it as the reason for the 50% reduction in subsidies for oil refineries, the so-called "dump fare", which compensates for the difference between the cost of fuel on the domestic and foreign markets. Fuel subsidies were cut to save the budget amid record military spending due to the ongoing war against Ukraine.

Combined with the weakening of the ruble and a significant increase in prices on the world market, this has made it much more profitable for traders and exporters to ship fuel abroad, earning profits for it.

The second reason for the jump in prices is the seasonal reduction in production due to repairs at oil refineries.

During the last few days, wholesale fuel prices in Russia have been decreasing, but before that, the cost of gasoline and diesel fuel was increasing throughout September and was at record levels.

From February 5, 2023, the European Union introduced an embargo on the seaborne import of Russian petroleum products: diesel, gasoline, aviation gas, fuel oil, etc.

From February 5, two limit prices for the supply of Russian oil products to third countries also came into effect. For diesel, the threshold is set at $100 per barrel, fuel oil at $45.